Diving Summary:
- Tyson Foods announced Monday that it will close its poultry, broiler, and hatchery processing operations in Glen Allen, Virginia, and Van Buren, Arkansas, resulting in the loss of approximately 1,700 workers. In an email, company spokesman Derek Burleson said the goal of the closures is to “strengthen our poultry business by optimizing operations and utilizing the full capacity available at each plant.”
- Tyson said he is working to ensure employees have the option to apply for positions at other facilities. The company said it is working with local officials to help workers who want to stay in Glen Allen and Van Buren, and will provide relocation assistance where appropriate.
- Amid a period of fluctuating demand levels for its products, Tyson has made strategic decisions over the past year with the goal of optimizing its supply chain to increase efficiency.
Diving information:
Tyson’s decision to close two of its facilities, which the company says is in line with its strategy to increase its poultry capacity, came as a surprise to affected employees.
In a statement to The Wall Street Journal, the poultry giant said its “current scale and inability to economically improve operations” led it to make the decision.
The United Food and Commercial Workers Local 400, which represents the nearly 700 Virginia employees that Tyson announced he intends to lay off, said in a statement that the company did not warn the union about the closure.
“These men and women risked their lives and the safety of their families to keep this plant operational during the pandemic, and this is the thanks they get?” local union president Mark Frederick saying.
In 2021, Tyson announced his intention to build a new $300 million plant in Danville, Virginia, in the same county as Glen Allen, to produce fully cooked chicken products such as Any’tizer chicken nuggets and chicken nuggets. The facility is still under construction and will open in August, local news outlet WDBJ reported last month.
Frederick He said Tyson has received “untold sums of taxpayer dollars” to build the Danville plant. Asked if the company has a response to the union’s accusation, Burleson told Food Dive that caring for affected employees is Tyson’s top priority and that he hopes they will find new positions with the company.
The plant closures follow recent economic volatility at Tyson, which previously saw a massive surge in profits following a spike in demand for meat during the pandemic.
On its most recent quarterly earnings call last month, the company missed earnings expectations, in part due to weaker demand for its fresh chicken products. CEO Donnie King said he took a “hit in the mouth” in the quarter because of all the protein available on the market.
Last year, high demand for its meat products resulted in supply problems that Tyson said it was aiming to improve by implementing aggressive strategies, including increased automation at its facilities and worker retention programs.
